BLP

The digitization of information, and subsequently of communications and processes, has had a strong impact on the financial services industry. The introduction of information and communication technology in the industry, along with its fast-paced evolution, induced a transformation that led to the development of new financial products and, consequently, to the birth of the concept of financial technology (or Fintech). In the same way, within the fintech industry, the increasingly widespread adoption of distributed ledger and cryptocur-rencies has led to the birth of new atypical financial products, culminating in what is currently known as Decentralized Finance (or DeFi). DeFi is a cross-disciplinary subject, a paradigm shift in roles and responsibilities, that does not fit in the patterns and schemes set by traditional finance. The objective of this article is to give the audience an insight into what DeFi is, assessing how it works and what are its differences with respect to traditional finance. Having set the basis for a better understanding of its peculiarities, the ultimate goal is to hypothesize and assess what challenges it poses or will pose to regulators.